Marine Insurance – Duty Insurance Policy is the insurer's specialised cover addressing a gap most importers don't think about until it's too late: once your cargo lands and customs duty is paid, your goods' "insured value" under a standard cargo policy may no longer reflect what you've actually invested. If that cargo is then damaged in onward transit, the Duty Insurance Policy reimburses the customs duty paid on the damaged portion — duty that wouldn't otherwise be refunded.
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"The insurance is on 'Increased value' of cargo by reason of payment of custom duty at the port or place of destination. This policy is not a valued policy and claims are payable on the basis of actual duty paid or on the basis of the Sum insured, whichever is less." — the insurer's own product page. This is a narrow, specific cover — not a general cargo policy, but a companion product addressing one specific financial exposure: customs duty.
A standard marine cargo policy typically insures goods on a CIF (Cost, Insurance, Freight) basis. Once customs duty is paid at the port, your true investment in those goods is higher than CIF — but your cargo policy's sum insured may not have moved.
GapDuty is paid at the port, but the goods still need to travel onward to your warehouse. If damage happens during that specific leg — after duty payment but before final delivery — your cargo policy alone may leave the duty cost uncovered.
Window"The policy covers loss of custom duty paid on that portion of goods damaged in transit, but not refunded/refundable" —, the insurer's own page. If the customs authority won't refund duty on damaged goods, this policy is what fills that specific gap.
ExposureSince this policy covers a narrower, more specific exposure than full cargo value, premium is typically meaningfully lower than your main cargo policy — making it a relatively low-cost way to close a real gap.
Cost-Efficient Add-OnThis policy cannot replace your cargo policy — it only responds after your cargo claim is admitted. Think of it as an add-on layer addressing one specific gap, not standalone protection.
Dependency"This policy is not a valued policy" —, the insurer's own page. Claims are settled on the lower of actual duty paid or your sum insured — not on a pre-agreed value.
BasisProbitas Insurance Brokers· takemyinsurance.com
Most importers focus on insuring the goods themselves and treat customs duty as a separate, almost incidental cost of doing business — something paid and then forgotten. The reality is that duty paid on damaged goods represents real, lost money that a standard cargo policy typically wasn't designed to address. This is exactly the kind of gap that only becomes visible after a loss has already happened — which is why discussing it with Probitas before you need it matters.
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| Criterion | MIDP Terms |
|---|---|
| Eligible policyholders | Holder or assignee of the Import License; or the actual user who has purchased goods from a recognised Export house |
| Pre-condition | Must have a separate, valid marine cargo policy in place — Duty Insurance Policy is a companion cover, not a standalone product |
| Policy period | One year, if issued on an Open Policy basis |
| Timing of purchase | Industry-standard guidance: no insurance on "Increased Value" or "Duty" is typically granted after arrival of the carrying ship at the destination port (except where already arranged under an existing open cover) — arrange this in advance, not after arrival |
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"The policy covers loss of custom duty paid on that portion of goods damaged in transit, but not refunded/refundable." —, the insurer's own page. The core, and essentially only, benefit of this policy.
Core Benefit"The insurance is on 'Increased value' of cargo by reason of payment of custom duty at the port or place of destination." —, the insurer's own page. The insured amount reflects this duty-driven increase, not the goods' original CIF value.
Basis"Claims are payable on the basis of actual duty paid or on the basis of the Sum insured, whichever is less." —, the insurer's own page. A genuine indemnity structure, not a guaranteed payout of your full sum insured.
Settlement BasisNarrow, specific coverage
Common misconceptions
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| Element | Confirmed Mechanic |
|---|---|
| Basis | "Increased value" of cargo due to customs duty paid — not the goods' base CIF value |
| Valuation type | Not a valued policy — a policy of pure indemnity |
| Claim settlement | Lower of actual duty paid, or the policy's sum insured |
| Initial sum insured (if exact duty unknown) | May be issued on a provisional sum insured basis, since exact duty often can't be known before the cargo actually lands at the destination port |
| Final adjustment | The sum insured for duty is adjusted based on the actual assessed customs duty, typically at the expiry of the relevant open policy |
| Assignability | Generally not assignable, per comparable industry-standard Duty Insurance product wording — confirm the insurer's exact MIDP terms with Probitas |
Since exact customs duty depends on the assessed value and applicable duty rate at the time of clearance — which isn't always knowable with precision in advance — Duty Insurance Policy can be arranged on a provisional basis, then adjusted once the actual duty figure is confirmed. This is a sensible accommodation for a genuinely variable cost, but it does mean your initial premium quote may need revisiting once actual duty is assessed. Confirm this adjustment mechanism with Probitas when arranging your policy.
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"Total loss of whole or part of cargo prior to Duty becoming payable" is excluded —, the insurer's own page. If the cargo is lost entirely before reaching the point where duty would even apply, this specific policy doesn't respond.
"General Average, Salvage and/or Salvage Charges arising from any casualty prior to Duty becoming payable" is excluded —, the insurer's own page.
"The exclusions under Duty policy shall be in the line with cargo policy." —, the insurer's own page. Whatever your underlying cargo policy excludes generally carries through to the Duty Insurance Policy as well.
If your underlying cargo policy claim for the same loss is not admitted, the Duty Insurance Policy claim cannot proceed either —, the insurer's own page: "In order to admit claim under Duty policy, claim under cargo policy should be admitted."
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Since "claim under cargo policy should be admitted" before any Duty Insurance claim can proceed, your first and primary task is ensuring your standard marine cargo claim for the damaged goods is properly filed and accepted.
Gather documentation evidencing the exact customs duty paid on the affected portion of cargo — typically customs assessment documents, duty payment receipts, and Bill of Entry records.
Per industry-standard comparable PSU insurer guidance: "The assured should lodge a claim with C[ustoms]" as part of establishing the duty figure and any potential duty drawback/refund position before the insurance claim is finalised.
With your admitted cargo claim and confirmed duty figures in hand, submit your Duty Insurance Policy claim — settlement will be the lower of actual duty paid or your policy's sum insured.
Call Probitas at 022 4302 0000 for the insurer's exact MIDP claim documentation checklist and process — and make sure your cargo claim is filed correctly and promptly first, since the Duty Insurance claim is entirely dependent on that earlier claim being admitted.
Marine Insurance – Duty Insurance Policy — Frequently Asked Questions
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Tell us about your import activity and existing cargo cover, and we'll assess whether this companion policy makes sense for you.
By submitting you agree to our Privacy Policy and Terms & Conditions. Marine Insurance – Duty Insurance Policy (MIDP)· IRDAI Licensed. For holders or assignees of an Import License, or actual users who have purchased goods from a recognised Export house. A companion policy to an existing marine cargo policy — covers the "increased value" of cargo by reason of customs duty paid, specifically the loss of duty paid on goods damaged in transit that is not refunded or refundable. Not a valued policy; claims payable on actual duty paid or sum insured, whichever is less. Cargo policy claim must be admitted before any Duty Insurance Policy claim can be considered. Available on a one-year Open Policy basis. New cover is typically not granted after the carrying vessel arrives at the destination port (except under existing open covers) — arrange in advance. Sum insured may be provisional, adjusted to actual assessed duty. Exclusions mirror the underlying cargo policy, including total loss prior to duty becoming payable and General Average/Salvage prior to duty becoming payable. All terms per the insurer's MIDP policy document; confirm exact eligibility, sum insured basis, and premium directly with Probitas/the insurer before purchase. Probitas Insurance Brokers Pvt. Ltd.· IRDAI Lic. No. 528.